First-time buyers set to push house prices higher

The number of people hoping to get on the property ladder has reached its highest level for 12 months as first-time buyers brace themselves for an increase in house prices, research indicated today.

Just over 26% of people who expect to buy a property during the coming year were first-time buyers in April, up from 22.8% at the beginning of the year and the highest level since the second quarter of 2010, according to property website Rightmove.

The group said the increase was the result of many first-time buyers expecting house prices to increase during the coming year, with 33% predicting a rise in property values, compared with 22% at the start of 2011.

Fewer people believe house prices will be lower in a year's time, at 25% compared with 34% in the previous quarter, suggesting buyers are feeling increasingly confident that the recent slide in prices may have bottomed out.

But raising a sufficiently large deposit is still a major stumbling block for first-time buyers, with 44% citing it as their biggest concern.

Miles Shipside, director of Rightmove, said: "Despite prospective first-time buyers still being frustrated by deposit-hungry lenders and stifled by sellers unwilling to reduce their prices, this survey forecasts an upturn in their activity in the next 12 months.

"This is perhaps driven by their sense that the deals on properties to buy and mortgage funding criteria are not going to improve and so more have simply accepted these conditions and decided to act."

Around a fifth of first-time buyers', 22%, were worried about finding a property they actually wanted to buy and 11% said being able to keep up with their monthly mortgage repayments was an issue.

One in 10 were cautious about buying a home because of concerns about finances, either because they were worried about job security or had high levels of debt, while 6% worried about changes in house prices.

London has the highest proportion of first-time buyers, with 42% of all potential purchasers planning to buy in the coming year. The South West has the lowest proportion at 20.5%.